C150150 Feasibility Study

• Contract/PO #: C150150
• Contractor Name: Lower Arkansas Water Management Association
• Contract Type: Loan
• Water District: 67
• County: Bent
• Loan Projects - Doc Type: Feasibility Study

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PROJECTED LA WMA SHARE ASSESSMENT INCREASES TO COVER
OPERATING EXPENSES AND THE PURCHASE OF ONE-HALF OF
THE KEESEE WATER RIGHTS

2003 2004 - 2006 2007 2008 - 2009 2010 - 2013 2014 - 2033 2034 - 2036 2037 - 2043
,
$11.30 $20.35 $15.70 $18.93 $18.39 $17.56 $11.75 $.98

The above share assessment increases amount to an average assessment of $19.10 per share from
2004 through 2009, or an average assessment of$17.41 per share from 2004 through 2036.

As set forth in the above-table, LA WMA' s Board of Directors believes that when the
costs of obtaining a new $2,250,000 loan from the CWCB for acquisition of one-half of the Keesee
water rights are spread-out amongst LA WMA's shareholders, the actual increases in share
assessments that would be required to cover these costs become economically feasible for LA WMA
and its members. LA WMA will seek shareholder approval of this Keesee loan proposal once the
CWCB has approved it. Also, LA WMA could choose to cover these costs by increasing membership
dues in conjunction with a smaller increase in share assessments.

Another comparison that is particularly helpful to consider in evaluating the fin~ncial
feasibility of this Keesee loan proposal is the cost to LA WMA members per acre-foot of firm yield
and average yield replacement water with and without one-half of the Keesee water rights in
LA WMA's portfolio. That comparison is depicted in the Table below.

COST COMPARISON PER ACRE-FOOT OF LA WMA REPLACEMENT WATER

YEAR Cost Per Average Cost Per Average Cost Per Firm Cost Per firm
Year Acre-Foot Year Acre-Foot Acre-Foot without Acre-Foot with
without one-half with one-half one-half Keesee one-half Keesee
Keesee Keesee
2004 - 2009 $27.13 $33.02 $70.70 $67.55
2004 - 2036 $26.05 $31.14 $67.88 $63.71

The above table shows that the cost per firm acre- foot of replacement water during 2004 through
2036 will decrease by approximately $4.17 or 6.1 % for LA WMA members if one-half of the Keesee
water rights are acquired, while the firm yield of a LA WMA share would increase by approximately
.11 acre-feet or 30.7%. Further, given that LAWMA paid between $60 - $65 per acre-foot of
consumptive use replacement water during the summer of2002 the cost of$63.71 per acre-foot of
firm yield replacement water is reasonable.

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